taxes

How expiring Bush tax cuts will affect you

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5 percent tax hike

Taxes currently are collected based on five income tax brackets. Every taxpayer would face a tax increase because the current 10 percent tax rate would disappear.

That would mean that the first chunk of money earned -- up to $8,375 under 2010's tax brackets -- would be taxed at 15 percent.

A bit higher on the income scale, covering what most tax policy analysts consider middle-income levels, the existing 25 percent tax rate would go to 28 percent and the 28 percent tax rate would become 31 percent.

While the amount of income that would fall into each of these brackets next year is not finalized -- the IRS must wait for inflation numbers, as well as a Congressional decision on the tax rates themselves -- several tax policy groups have done their own calculations.

These analyses use historical tax data, pending tax proposals and predicted inflation adjustments to evaluate what could happen if the existing tax rates expire.


 

 

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